Sprint has killed one of the few advantages it network has -- unlimited tethered data. (Source: Paramount Pictures)

Smartphones will still be "unlimited"

Sadly the rumors of the demise of unlimited tethering data on Sprint Nextel Corp.'s (S) network are true. The company announced via a support post that it would be making "effective beginning with your next bill following notification", which would in essence kill unlimited 3G and 4G data on tablets, wireless modems, and smartphone hot spots.

"Unlimited" has long been Sprint's big selling point and it's a selling point that the company's ads continue to harp on:

Now -- as the carrier has long warned could happen -- a big chunk of the company's unlimited plans are about to die. Sprint announced that it will be capping most of its existing connections at 5 GB of 3G and 4G use. Past that, you will pay $0.05 USD per MB ($51.20 USD per GB). When roaming on non-Sprint networks you'll only get a 300 MB allowance and will have to pay $0.25 USD per MB ($256.00 USD per GB).

New users can opt into a lower 3 GB plan or a higher 10 GB plan (and existing customers will likely be able to call and adjust their plan upwards, albeit at a premium).

Tethering add-on costs ($29.99 USD/month) for existing users will not change for the transitional 5 GB/month package. But for new users hotspots will cost $45 USD for 3GB, $60 USD for 5GB, and $90 USD for 10GB of combined 3G/4G data.

[Source: Sprint]

These rates are pretty horrific in that they are by far the most expensive in the industry, surpassing even Verizon Wireless's rates of $50 USD for 5GB per month or $80 USD for 10GB per month (Verizon Wireless is a joint venture of Verizon Communications Inc. (VZ) and Vodafone Group Plc. (LON:VOD)).

Factor in that ClearWire's WiMAX network, which Sprint relies upon, is available in far less regions and is generally slower than AT&T or Verizon's LTE networks, this is looking like one horrible move for Sprint and its customers. ClearWire and Sprint have plans to deploy LTE, but for now essentially Sprint is offering customers an inferior LTE network at the nation's highest price.

The only real saving grace for Sprint is that it adds, "Additionally, if your phone plan contains unlimited data, you will continue to enjoy unlimited data usage on your phone while on the Sprint network."

But if the death of unlimited tethering doesn't give Sprint customers cause to rethink their plans immediately, it most certainly will give make them pause and reconsider their subscriptions. After all, if unlimited tethering data has been killed, Sprint's days of being the last provider to offer unlimited smartphone data are likely limited as well.

To add to the disturbing picture for Sprint subscribers, we recently exposed that Sprint was turning a blind eye to text message fraud on its network. It claims to allow premium service messages -- which it reportedly profits off of -- only via opt-in, but we revealed that many customers are being charged without ever opting in.